India's core industries growth slows down to 0.7% in May, the lowest in 9 months

The combined index of eight core industries (ICI), which measures the performance of production of these industries, slowed down to 0.7% in May 2025 on a year-on-year basis against 6.9% in the same month last year, thus seeing the lowest production growth in the past nine months.

The commerce & industry ministry says the production of cement, steel, coal, and refinery products recorded positive growth during May. The combined index of eight core industries represents 40.27% of the weight of items included in the Index of Industrial Production (IIP). Before this, the lowest production recorded by the eight core industries was in August 2024, at -1.5%.

The Ministry of Commerce & Industry says the final growth rate of the Index of eight core industries for February 2025, March 2025, and April 2025 was at 3.4%, 4.5%, and 1%, respectively. The total growth rate during April to May 2025-26 was 0.8% (provisional) on a YoY basis.

Commenting on the data, Rahul Agrawal, Senior Economist, ratings agency ICRA, agrees the performance of the core sector remained lacklustre in May 2025. "Excess rains in the latter part of May 2025, owing to the early onset of the monsoon, likely weighed on the performance of the electricity and some of the mining sectors in the month. However, the YoY performance of the steel, cement, refinery products and crude oil sectors improved in May 2025 vis-à-vis April 2025, partly offsetting the deterioration in the performance of the other sectors. Given these trends, ICRA expects the IIP growth to print at ~1.5-2.5% in May 2025," Agrawal tells Fortune India.

Coal production, representing the highest weightage of 10.33%, increased by 2.8% YoY in May 2025, with its index increasing 3.1% since April 2025-26. Crude oil, with a weight of 8.98%, declined by 1.8% YoY in May, with its index dipping 2.2% since April. Natural gas dipped by 3.6% and its cumulative index declined by 2.3% since April.

Petroleum refinery products were up 1.1% in May 2025, with its index down 1.7% during April to May 2025-26 YoY. Fertilisers also declined by 5.9% YoY in the said month, while recording a 5.1% decline since April.

Steel and cement production increased 6.7% and 9.2% YoY in May, while their index increased 5.5% and 7.8%, respectively, from April to May 2025-26. In terms of electricity generation, production dipped 5.8% in May, and its index declined by 2.2% YoY in April-May 2025-26.